FuelCell Energy (Nasdaq: FCEL) announced Sept. 9 an agreement to sell its 1.4-MW fuel cell power plant project at the University of Bridgeport in Connecticut to NRG Energy (NYSE: NRG).
The ownership of the project will transfer to NRG Energy upon substantial completion of construction and is also subject to customary closing conditions. The University of Bridgeport will buy the electricity and heat produced by plant under a multi-year power purchase agreement (PPA).
FuelCell Energy developed the project and is currently building it. FuelCell Energy will continue to perform operation and maintenance services for the project after the sale and over the life of NRG’s multi-year PPA with the university. Commercial operation is expected no later than early 2015.
“NRG is continuously looking to grow our portfolio of distributed generation assets that provide customers with cleaner, sustainable, and more resilient ways to meet their energy needs,” said Mauricio Gutierrez, Chief Operating Officer of NRG Energy. “The FuelCell Energy installation meets that criteria, and importantly, increases our customer resilience and sustainability.”
“This transaction highlights our business model as we develop projects, install the power generation, operate and maintain the plants, and partner with NRG Energy to own the asset and sell the value streams,” said Chip Bottone, Chief Executive Officer of FuelCell Energy. “This project investor approach is a market-enabling repeatable model providing the benefits of affordable and clean on-site power to the end-user without the need for the end-user to invest directly in the power generation asset. And, we expect this structure to help accelerate transactions, particularly for non-profit entities such as universities, hospitals, and municipal government agencies.”
Fuel cell power plant installations such as this project are particularly attractive to universities for a number of reasons, FuelCell Energy noted, including:
- Combined heat and power enhances the economics and supports sustainability initiatives.
- Micro-grid projects like this provide energy security for the campus as it provides approximately 80% of the university’s energy.
- The fuel cell power generation process supports sustainability initiatives and facilitates the air permitting process due to its minimal air emissions.
With more than 300 MW of power generation capacity installed or in backlog, FuelCell Energy is a global leader in providing ultra-clean baseload distributed generation. The company’s power plants have generated more than 2.7 billion kilowatt hours of ultra-clean power using a variety of fuels including renewable biogas from wastewater treatment and food processing, as well as clean natural gas.